TietoEnator Reports Q3

TietoEnator's Q3 results: profitability improved throughout the company

October 28, 2008

2 Min Read

HELSINKI -- TietoEnator's third-quarter net sales grew by 5% to EUR 425.3 (404.7) million. Operating profit excluding one-off items rose to EUR 36.7 (20.7) million, representing a margin of 8.6% (5.1). In most sectors, the market situation remained fairly positive in the third quarter.

All business areas improved their profitability. The actions related to the Performance Improvement Programme were the main contributor to the rise in margin. Thanks to the programme, the utilization rate has increased and the company has substantially improved quality in deliveries. In line with its strategy, the company has also increased resources in the global centres of excellence, where the number of personnel has risen by almost 50% from last year. TietoEnator estimates that the plan will generate annualized cost savings of EUR 130 million as from the end of 2009.

Profit before taxes totalled EUR 30.3 (17.8) million and earnings per share amounted to EUR 0.33 (0.15) in the third quarter.

TietoEnator anticipates the overall IT market to grow at a modest rate during the rest of 2008 due to the economic slowdown. However, the effects on IT investments will vary by service type. There are signs of cautiousness regarding future IT investments in new solutions. On the other hand, customers seek to rationalize their operations and this is expected to maintain healthy demand for application and ICT infrastructure management as well as maintenance in most sectors.

TietoEnator's President and CEO Hannu Syrjälä:
"Now that times are tougher, it is important that we are able to support our customers as they seek to improve their performance. Our new operating model, based on industries, countries and service lines, helps us do this, as it will make us more sensitive in recognizing customer-specific needs and developing our offering to meet the demand. This, coupled with our investments in developing sharper, competencies and more productized offerings, will result in more added value for our customers."

Tieto Corp.

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